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Monday, 17 March 2014

I wrote over two years ago about Belgium's efforts (or rather the federal constituent parts of Belgium) to introduce a nationwide truck tolling system, in parallel with a light vehicle vignette. The truck toll part of it is moving forward, but the charge for light vehicles is on a different timescale. The vignette has been cancelled, as the three Belgian regional governments look at alternative solutions.

Distance based truck tolling

The three Belgian regions are currently mid-tender for procuring a heavy vehicle distance based tolling system. It is currently branded as Viapass. The entire system will be developed, built, financed, maintained and managed by a single private consortium (yet to be selected).

The toll will apply to all goods vehicles over 3.5 tonnes and to their use of all public roads in Belgium. The procurement structure is that the entire toll system is to be undertaken by a PPP based on a construction/deployment period of 1.5 years (in my view, a little too short to effectively manage all risks, except at considerable cost) and an operating contract of 12 years. The intention is to have the system operational by 2016.

Furthermore, governance of the scheme is curious in that governance will be by all three Belgian regions; Flanders, Wallonia and Brussels, NOT by the Federal Government. All regions will be separately liable for the payment of availability fees to the supplier, with that service provider responsible for the end-to-end charging service and fraud control.

The Belgian regions don't know how many accounts they will get, but have asked for scenarios from suppliers ranging from 400,000 to 1 million OBUs (On Board Units) for trucks, with indicative initial capital costs ranging of €225 million – €350 million (US$314million-US$488 million).

So the provider of this system will be paid according to availability payments, and will also be paid for the midlife refurbishment of the OBUs (after 5-6 years). The service provider will finance the system itself, and direct all toll revenues to the three regional governments according to the vehicle kilometres driven on the roads of each regional government (with costs distributed on a similar basis).

The policy rationale for the project is to recover the infrastructure costs of HGVs, and to use that revenue to maintain and improve the road network. It is also expected that the toll rates will reflect environmental impacts (lower tolls for trucks with the cleanest burning engines).

With the introduction of this toll, Belgium will withdraw from the trans-national "Eurovignette" charge, which is a prepaid pass for using the major highway networks in Belgium, Luxembourg, the Netherlands, Denmark and Sweden. So it is a replacement of an existing charge, although the Eurovignette only applies to trucks 12 tonnes and over, whereas this charge covers them down to 3.5 tonnes.

Toll rates have not yet been determined, but by European law they must not exceed the proportion of infrastructure costs fairly attributable to the vehicles being charged, and a calculated charge for environmental externalities (which has to be justified).

The system envisages GPS technology, with OBUs able to be installed by truck drivers themselves in the cabs of their vehicles. That is a step beyond past systems requiring professional installation (and may raise issues about whether installation affects reliability).

It will apply to all national highways, the orbital roads around the main cities, and a number of other important main routes. The Regions can include more roads in their networks to avoid traffic diversions to roads without a toll.

It is intended that trucks from countries with similar toll systems (Germany, Slovakia) will be able to operate freely in Belgium with full interoperability. Given the relative ease to get an account and self-install OBUs for this charge, it isn't thought that foreign trucks would regard this system to be a barrier to operating freely in Belgium.

So truck tolling across Belgium is proceeding.

Light vehicles likely to be on a similar system in due course

It was decided last year that the proposed vignette for all vehicles under 3.5 tonnes will not proceed.

The vignette was meant to offer access to the main roads for 10 days, two months or a year at a time. It was meant to replace the vehicle registration tax and annual road tax, both taxes on owning a car.

Flanders News reports that 1,200 vehicles are taking part in the pilot project, which involves not paying road tax, but instead paying by distance at peak times. The report says:

During rush hour, between 7 and 9am and from 4 to 6pm, using the motorway will cost you 5 eurocents. On other roads, this will be 6.5 eurocents, and in the city up to 9 cents.

That trial will be interesting, and I hope to get more details about it shortly. What matters is that any system needs to take into account the large number of foreign light vehicles that operate in and out of Belgium every day. Given Belgium has no land border checkpoints, there will need to be easy options for such vehicles and to enforce any charge upon them if a distance based system is to be implemented for such vehicles.

Conclusion

On trucks, Belgium joins the growing list of European countries that are charging trucks by distance. Including those not using GPS, this is now six and Belgium will be the seventh (although you might argue the basis for toll rates in both Portugal and Belarus is by distance). This is likely to increase revenue from foreign trucks, and also provide more efficient use of the road network.

On light vehicles, the politics of introducing any new system are more difficult, but it looks like the Belgian regions are more advanced than was previously thought. Perhaps the truck toll, if it proves successful, will be the first step towards charging all vehicles on a similar basis. Hopefully the trial in Brussels is helpful, but I think a far wider trial may be more useful. In particular, I would think that allowing new vehicle owners to opt into paying by distance would be one step forward (as it avoids registration and road taxes from the start). Certainly over the longer term, it offers the prospect of using distance charging to address congestion issues.

As a side point it is interesting that none of this is being done at the Federal level, but instead by all three constituent regional governments. It creates obvious risks for any service provider, having a contract with three governments in parallel. However, if it works it will show a somewhat different model for governance of these sorts of systems.

Considering that some think the story of the European Union is about EU politicians based in Brussels seeking to have more pan-European governance and regulation of economic matters, it is ironic indeed that in Belgium itself, a matter that many would assume should be at the national level is being decided at a regional level.

It's also worth mentioning one word - Galileo. A fortune has been spent by European taxpayers establishing a rival to GPS, but there is no indication that the Belgian system will necessarily be using it. It will be interesting indeed as to whether the eventual winning consortium using GPS, Galileo, EGNOS or some combination of them. I'd expect it to do so. However, if Galileo and EGNOS get sidelined, it will raise questions as to whether they really were worth it, given what an important application road charging is to such systems.

Finally, note that fuel tax is completely absent from this debate. In part, because fuel tax is mandatory under EU law, but also because it is a Federal matter. However, the platform nationwide road charging would create to partially replace fuel tax in Belgium does beg the question as to whether there would be efficiencies in doing do.

No, this is going to be something that the successful tenderer will have to implement, and negotiate with Toll Collect and Skytoll and could be treating Belgium as a territorial extension of those systems. Of course, it would be meaningless without the prospective Belgian system being able to do the same.

It is questionable, if those systems existing in Germany and Slovakia would really fulfill the requirements in Belgium. Probably, this may only be achieved by add-ons to their domestic concepts, which is not an easy affair ...

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What is road pricing?

Road pricing is any system that directly charges motorists for the use of a road or network of roads. Traditionally it has meant tolls on single routes, particularly crossings such as bridges or tunnels. More recently it also includes area, cordon and zone pricing of urban areas, and distance and time based charging of whole networks. It does not include fuel or tyre taxes, or taxes on ownership or purchase of road vehicles.